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REPORT: NEARLY HALF OF GROWING U.S. FIRMS HIT BY BREACHES

Posted on December 1, 2003

      Nearly half of the fastest-growing U.S. companies have suffered security breaches, but most still aren't prepared to dedicate enough resources to address the problem, according to a study by PricewaterhouseCoopers.

      PwC said 46 percent of what it calls "trendsetter companies," which are those growing revenue the fastest, reported attacks. While most said they were victims of worms or viruses, 17 percent reported unauthorized network access, 13 percent suffered denial of service and 2 percent had wireless assets compromised. The survey found that 83 percent of attacks resulted in monetary loss, while more than 20 percent caused network downtime.

      Meanwhile, just 15 percent of some 400 CEOs interviewed for the survey plan to increase security spending this year, and 2 percent said they would cut spending. Asked about longer-range plans, more than half said security would become a higher priority--a sign, says PwC consultant and survey report author Mark Lobel, that the firms don't feel a sense of urgency about information security.

      "To these expanding firms, step one is to grow the business. How else do you do that but accept more risk?" he says. "The real question is, 'Are they intelligently taking those risks or just accepting those risks without doing due diligence and applying sound judgment?'"

      Lobel says the results suggest that even when companies are directly hit, such as by a widespread virus, they still do not react by dedicating more resources to information security, such as creating a CISO position. "I'd say it's a combination of ignorance and a certain amount of arrogance," he adds.

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